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Traders expect coconut production in Kerala to dip 25-30 per cent this year, while in Tamil Nadu it is likely to fall by 15-20 per cent. They say high coconut and coconut oil prices — even as the peak production season is mid-way in Tamil Nadu and wounds to a close in Kerala — indicate such a fall. This is in contrast to the estimates of the Coconut Development Board, which anticipated a fall of 15-20 per cent in Kerala. But the board also believed that the lower production from Kerala would be partly offset by increased production from Tamil Nadu. Coconut oil prices moved up to Rs 100 a kg in Kerala, even as it was quoting at Rs 98 a kg in Tamil Nadu. While arrivals in markets in Tamil Nadu have shrunk because of low conversion rate of copra to coconut oil on account of rains, it has arrested coconut oil movements to Kerala for consumption as well. Other competing edible oils are moving in to prop up consumption demand. Palm oil was quoting at Rs 62 a kg, while palm kernel oil fetched Rs 90 a kg.
Prices firm
With persistent labour shortage in the coconut-growing belt of Tamil Nadu, rains curbing conversion to coconut and increased exports, prices are expected to remain firm. Exports to Gulf countries, Pakistan and Bangladesh have been significantly up as Sri Lanka, which used to meet demands of these countries, has itself become an importer this year.
The firm trend could extend into the remaining part of the year as the peak production season in Kerala and Tamil Nadu, which together account for over 70 per cent of the country's output, would be over soon. Then there is another six months before the peak production season sets in over the producing belt of South India.
With prices having held firm in the last few months, industrial demand remains pent-up. Industrial and consumption demand are likely to keep prices firm in the future. Price direction would also depend on production trends in Karnataka and Andhra Pradesh, although they are not as significant players as the other two southern States.
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